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Sony Goes Minimalist

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No-frills TV offers clear picture of consumer sentiment.

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Sony Corp (SNE) is fighting to retain a top spot in the highly competitive market for consumer electronics, specifically televisions.

Facing higher input costs, a weakening U.S. economy and stronger yen, not to mention fierce competition from Samsung Group and Visio, the company's on the ropes. Once an industry leader, Sony has seen market share whittled away by rivals offering a sharper picture at a more competitive price.

As Professor Reeves points out, given today's universally very good image quality, TV manufacturers are increasingly being forced to compete on price.

Fortunately, The Wall Street Journal reports, Sony's earnings release next week will show strong sales of a TV with a minimalist bent. Engineers in Mexico designed a modest flat screen set, called the Bravia M, that retails for $200 less than the next most affordable model.

Designers used available parts and skimped some on features to achieve the lower price point. Cost-conscious consumers have snatched up Bravia M's faster than the company expected.

Originally aimed at mass-retailers like Wal-Mart (WMT), soon after its release last summer, specialty stores like Best Buy (BBY) and Circuit City (CC) started to demand inventory of the Bravia M.

Shoppers' no-frills preference can easily be attributed to a weaker domestic economy. It also demonstrates how buying behavior is altered by social mood. Forced to make tough buying decisions, consumers will realize that it's possible to survive on fewer dollars, a smaller screen and less of what they've come to deem essential.

So the picture is clear: For now, manufacturers that cut costs without sacrificing quality
will find a ready buyership.

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No positions in stocks mentioned.

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